Most economists expect that economic growth will remain slow in Q4 2023, and a modest, short-lived recession is still possible at some point in the next 12 months.
In Q3 2023, global flight operations declined by 2.8 percent year-over-year, but were up 2 percent from Q2 2023. Charter operations also experienced a decline from higher post-COVID levels.
Aircraft Manufacturers backlog
OEM backlogs increased 5.9 percent year-over-year in Q3 2023. Even as buyers continued to order new aircraft, supply chain and labor constraints prevented substantial production increases. Backlogs and lead times are expected to remain above pre-COVID levels for the next few years.
Both the new and pre-owned markets declined in terms of units traded in Q3 2023 year-over-year. While overall transaction volume is down, fewer new deliveries may help limit inventory growth and support healthier values for the market.
Inventory increased by 22.7 percent year-over-year in Q3 2023. By the end of Q3 2023, inventory stood at 6.6 percent of the total fleet, which is below average levels of around 10 to 11 percent over the last decade. Inventory is expected to continue to gradually increase throughout the rest of 2023.
Average business jet bluebook values climbed 4.8 percent in Q3 2023 year-over-year. Q3 2023 values on 13-year-old and older aircraft were up 7.4 percent compared to a 3.9 percent increase for younger aircraft. Even as bluebook values increased, the market returned to a more normal depreciation pattern in Q3.